2017 (3) TMI 411 - HC - Central Excise

Natural justice - appellant contends that that at the time of hearing of the appeal before the learned Tribunal, number of submissions were raised and numbers of decisions were cited, however they have not been dealt with and / or considered by the learned Tribunal. It is the case of the appellant-assessee that even subsequently when the ROM was filed pointing out the aforesaid, again the same have not been dealt with and / or considered by the learned Tribunal - Held that - keeping in view, the impugned judgment and order passed by the learned Tribunal and even the RMO filed by the appellant, we are of the opinion that the decisions relied upon by the appellant have not been considered at all by the learned Tribunal. Some of the submissions which were raised are also not dealt with by the learned Tribunal - Under the circumstance, the matter is required to be remanded to the learned Tribunal to consider the appeal afresh in accordance with law and on merits and after dealing with all the submissions which may be raised and after dealing with the decisions cited at the bar - appeal allowed by way of remand.

Issues Involved:
1. Whether the appellant manufactured and cleared finished goods clandestinely without payment of duty.
2. Whether the Revenue sufficiently discharged its burden to prove illicit manufacture and clearance without payment of Central Excise Duty.
3. Whether the Tribunal's order violated principles of natural justice by disregarding points urged without providing findings.

Issue-wise Detailed Analysis:

1. Clandestine Manufacture and Clearance of Goods:
The appellant challenged the Tribunal's decision, which confirmed the Order in Original by the Adjudicating Authority, alleging that the appellant manufactured and cleared goods without paying duty. The appellant argued that evidence presented to the Tribunal demonstrated compliance with duty payment obligations. The Tribunal's failure to address these evidences was central to the appellant's grievance.

2. Burden of Proof on Revenue:
The appellant contended that the Revenue did not sufficiently prove that goods were illicitly manufactured and cleared without paying Central Excise Duty. The appellant's position was that the Tribunal did not properly evaluate the evidence or the legal standards required to establish such a claim. The appellant sought a reconsideration of the evidence and a detailed judicial analysis to determine if the burden of proof was met by the Revenue.

3. Violation of Principles of Natural Justice:
The appellant argued that the Tribunal's order violated principles of natural justice. Specifically, the appellant highlighted that numerous submissions and cited decisions were not addressed in the Tribunal's judgment. The appellant emphasized that a speaking and reasoned order was necessary, as per legal precedents, to ensure transparency and fairness. The appellant relied on several Supreme Court and High Court decisions, asserting that the Tribunal failed to provide a judicious and reasoned order, thus warranting a remand for fresh consideration.

Judgment and Reasoning:
The High Court, after hearing both parties, found merit in the appellant's arguments regarding the violation of natural justice. The Court noted that the Tribunal did not address the appellant's submissions and cited decisions, which is a fundamental requirement for judicial orders. The Court referenced multiple precedents underscoring the necessity for reasoned orders, emphasizing that judicial decisions must reflect due application of mind and clarity in reasoning.

The Court highlighted that the Tribunal's order lacked the necessary detail and consideration of the appellant's arguments and cited decisions. This omission was deemed a significant procedural lapse, undermining the principles of natural justice. The Court cited cases such as "Rajesh Kumar & Ors vs. Deputy Commissioner of Income Tax & Ors." and "Gautam Harilal Gotecha vs. Deputy Commissioner of Income Tax (Investigation)" to reinforce the requirement for detailed and reasoned judicial orders.

Conclusion:
The High Court quashed the Tribunal's judgment and remanded the matter for fresh consideration. The Tribunal was directed to re-evaluate the appeal, addressing all submissions and cited decisions comprehensively, within three months. The Court partially allowed the appeal, specifically holding in favor of the appellant on the issue of natural justice (Question C), while not providing a definitive answer on the substantive issues of clandestine manufacture and the burden of proof (Questions A and B).

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